Inflection Point
Gary Kaltbaum is an investment adviser with over 18 years experience, and a Fox News Channel Business Contributor. Gary is the author of The Investors Edge. Mr. Kaltbaum is also the host of the nationally syndicated radio show “Investors Edge” on over 50 radio stations. Gary is also editor and publisher of “Gary Kaltbaum’s Trendwatch”… a weekly and monthly technical analysis research report for the institutional investor. If you would like a free trial to Gary’s Daily Market Alerts click here or call 888.484.8220 ext. 1.
I have been gathering my thoughts about the latest government takeovers and will gladly send you my latest rant over the coming weekend…but markets are more important right now.
The March 12th follow through day remains in force thus markets remain in a confirmed rally. Yes, there are warts but they are to be expected as the market was destroyed. It simply takes time to repair the damage so it is normal for the markets to stall at logical resistance and moving averages. For me, the past two days were nothing more than a normal pullback after a not so normal V-SHAPED move off the lows. I will know a lot more in coming days as markets will either give up at resistance or try to fight through the resistance. I try to not have a bias and just let the market do its bidding…but I think there is a chance that eventually, markets will move through this resistance eventually for another leg up. After that…not a clue.
Here is what I like:
NEW LOWS contracted in a big way on the last time down…indicating fewer stocks were participating on the downside. Many times this is an early warning sign that the market is trying to get healthy.
Leadership, while still sparse, has picked up. In fact, many leading names did not budge in the past two days.
More and more names are now starting to come up the right side of bases. This always happens in a market trying to turn.
A few more groups are now coming up. In my past 2 TV appearances, I mentioned Panera and Darden in the RESTAURANT group. Both have soared as the RESTAURANT group comes to life. Don’t ask me how, as it seems business is light every time I go out. I am also seeing better action in misc. RETAIL…especially the DISCOUNTERS.
Here is what I don’t like:
I believe any rally will need the COMMODITIES and so far they have lagged badly on this move up. They will have to participate. The good news here is that many names and many areas are in 6 month bases off the bottom. All these areas would need to see is a few days of serious accumulation to take them out of these bases…so this is a must watch.
Too many bottom callers…still. Maybe we should just resign ourselves to the fact that these bottom callers, who have been calling bottoms since 13,900 DOW will just never stop no matter where the DOW went. I am almost thinking they would be calling bottoms even if the DOW went to 2,000. I would have thought 55% would have got rid of them. Nothing doing. I would just rather see markets going up with a lot of doubt.
It seems to me FINANCIALS only go up when the government is pulling another save. The latest is the Enroning of toxic assets from their balance sheets and the easing of accounting rules. Ain’t this great! Companies that did bad get rewarded by pulling their dung off their balance sheets and then they get to play more games with their numbers even though these are the reasons for the problems in the first place. I would love to see FINANCIALS go up with no news from the government wheel-o-rama.
I suspect earnings season will tell a huge tale. Remember, it will not be the news. It will be how the markets, sectors and stocks react to the news. Should be more thrills a minute action.
Disclaimer: The opinions expressed herein are those of the writer and may not reflect those of Wunderlich Securities, Inc. or any of its affiliates. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.